Figment is currently running validators on Kusama, Polkadot’s canary network. Their mainnet is scheduled to launch some time in Q2/Q3 2020. If you would like to learn more about Polkadot mainnet launch and future staking opportunities with Figment, then please contact Clayton (firstname.lastname@example.org).
Polkadot is a platform that allows diverse blockchains to transfer messages, including value, in a trust-free fashion; sharing their unique features while pooling their security. In brief, Polkadot is a scalable, heterogeneous, multi-chain technology.
Polkadot is being built by Parity Technologies, who was contracted by Web3 Foundation. Web3 was founded by Gavin Wood, one of the co-founders of Ethereum.
A primary use case for Polkadot is enabling interoperability between chains, regardless of their features or their status as a private or public chain. Interoperability lets diverse chains perform arbitrary messaging, including value.
This interconnectivity could encompass privacy-oriented projects, forks, permissioned chains and more. Polkadot will allow all parties to take public and private chains and “plug them in” to a shared connectivity layer. Chains can choose to maintain their own validator set or utilize Polkadot’s pooled security system to verify their transactions via the Relay Chain. With Polkadot the features of one chain can be potentially leveraged on another.
It is important to understand how the network will function, and how you will be able to maximize your rewards...
The Polkadot universe is designed to distribute stake backing as evenly as possible over the validator set. Staking Kusama guide.
Polkadot uses NPoS (Nominated Proof-of-Stake) as its mechanism for selecting the validator set. The system will encourage DOT holders to participate as nominators that elect which validators may participate. Nominators may select up to 16 validators as trusted validator candidates to stake with.
Validators will assume the role of producing new blocks, validating parachain blocks, and guaranteeing finality. Nominators may select validator candidates, enabling the protocol to potentially select and back some of these validators with their nominators’ stake.
The protocol will pay out rewards equally to each active validator. However, distribution of the rewards are pro-rata to all nominators (less validator commission fees). In this way, the network incentivizes the nomination of lower-staked validators to create an equally-staked validator set.
You can find more information here.
There will be two different accounts for managing your funds: stash and controller.
This account directly controls the funds bonded for staking. In order to make and change staking decisions easily, and without compromising security, the stash account is used to designate a separate address called the ‘controller’ to make staking decisions, and without giving the controller direct control over the “stash” funds.
Once designated by the stash account, the controller is used to make staking decisions, like nominating and bonding. You’ll need a small amount of funds in this account to pay for transaction fees. The controller account can be changed at any time by the stash account.
Why two accounts? Security can be prioritized for the ‘stash account’, keeping its funds in cold storage, while having the convenience of being able to easily change nomination decisions (without the risk of exposing the stash account’s private keys when signing the necessary transactions).
Polkadot will allow token holders to point their Stash account to any Controller account.
With Figment’s fully-managed service, DOT holders are able to point to a Controller account we control, enabling us to optimally nominate your chosen validators in order to maximize the amount of rewards generated.
With NPoS validators will need to spin up new nodes and reallocate nomination to not overload nodes. Our fully managed services will optimize returns on your behalf.
Yes, your DOT will stay in your stash account, which you control at all times. Figment’s service is non-custodial and allows nominators to use any custody method that they choose.
You will maintain custody of your DOT at all times in your stash account and can nominate while your DOT are in cold storage, allowing holders to easily work with any custodian.
All DOT token transfers, including rewards, are processed within the Polkadot protocol. Figment never has custody of your tokens or rewards.
After unstaking, there is a 28 day unbonding period before being able to transfer your tokens. During this unbonding period, your DOT do not earn rewards and are illiquid. They are kept bonded for 28 days in order to be held responsible (ie. slashed) for any protocol violations their backed validators may have committed, since detecting these violations can take hours or days to detect and prove.
Nominated DOT are subject to Polkadot slashing conditions.
Figment provides a 100% missed reward guarantee for any missed rewards due to liveness (downtime).
Your tokens are subject to a potential slashing if a validator “double-signs.”
In Polkadot, validators that have poor performance or violate protocol rules will have a percentage of staked tokens slashed.
Slashing occurs when a validator signs two blocks at the same height, which is called an equivocation. This is most likely to occur when a validator mistakenly activates a backup validator when their primary validator is still online.
Slashing can also occur for being offline, but it only occurs when at least 10% of the network goes offline simultaneously, and it’s a much smaller penalty.
Figment has therefore prioritized avoiding equivocation over liveness (uptime).
Be cautious of validators that have only cloud-based infrastructure or complicated software based redundancy systems aimed at minimizing liveness. Complicated redundant backup systems that optimize for uptime can result in double signing and up to 100% slashing.
Fees will be charged at the validator level, not the controller level. So if you bond your stash to our controller, and we then nominate one or more Figment validators and one or more other validators, we only charge fees on the Figment ones. We also would remain non-custodial – rewards will be paid directly to the stash account, so we never touch tokens that you receive “from” third-party validators.
An era in Polkadot is 1 day.
If you have sizeable holdings, consider using two accounts. Put most of your holdings in your stash account, and several DOT in your controller account.
Your controller account can be used to vote and nominate in a convenient way, while your funds stay stored in your stash account in a secure way.
The several DOT in your controller account are used to pay for transaction fees involved with nominating and voting.
In most proof of stake protocols validators earn a fixed percentage of rewards. However, in Polkadot, every validator node receives a fixed amount of DOT tokens and the remaining are distributed to nominators on a pro-rata basis.
Therefore, the effective price you pay to your node operator is the pro-rata share of remaining rewards after the validator’s fixed fee has been deducted.
Those rewards are distributed on-chain at the end of each era (approx. 24 hours).
You must manually claim your rewards via the Polkadot Explorer.
Staking rewards are kept available available for 84 days.
If you do not claim your staking rewards by this time, then you will not be able to claim them and some of your staking rewards will be lost.
You can learn more about how to claim your rewards here.